Introduction

The case of Swallow Security Services Ltd v. Millicent ([2009] UKEAT 0297_08_1903) centers around the issue of unfair dismissal and the consideration of contributory fault by Employment Tribunals. Swallow Security Services Ltd, a security company, employed Mrs. Millicent as their General Manager. The employment relationship deteriorated following Mrs. Millicent's unauthorized additional paid holiday and subsequent actions that led to her dismissal. The Employment Tribunal initially found in favor of Mrs. Millicent, awarding her compensation for unfair dismissal. Swallow Security Services Ltd appealed the decision, arguing that the Tribunal failed to consider any contributory fault on Mrs. Millicent's part, a point they raised only on appeal.

Summary of the Judgment

The United Kingdom Employment Appeal Tribunal (EAT) reviewed the appeal brought by Swallow Security Services Ltd against the Employment Tribunal's award to Mrs. Millicent for unfair dismissal. The EAT held that the Employment Tribunal was legally bound by Section 123 of the Employment Rights Act 1996 (ERA) to consider any contributory fault by the employee when assessing compensation for unfair dismissal. The Tribunal had previously determined that Mrs. Millicent's actions, such as taking unauthorized holiday and failing to apologize for her conduct, contributed to the breakdown of her employment relationship. However, the Tribunal did not factor this contributory fault into the compensation awarded. The EAT allowed Swallow's appeal, remitting the case back to the Tribunal for a proper consideration of contributory fault.

Analysis

Precedents Cited

The judgment extensively references several key cases that have shaped the legal understanding of contributory fault in unfair dismissal cases:

• Langston v Cranfield University [1998] IRLR 172: Established that Employment Tribunals must consider established legal principles even if not raised by the parties.
• Red Bank Manufacturing Co Ltd v Meadows [1992] IRLR 209: Reinforced the necessity of applying the Polkey principle in assessing compensation.
• Robert Whiting Designs Ltd v Lamb [1978] ICR 89: Clarified that contributory conduct should be considered even when a bogus reason for dismissal is presented.
• Mensah v East Herts Trust [1998] IRLR 531: Differentiated scenarios where tribunals must consider all matters in a claim versus when they are not required to do so.

These precedents collectively guided the EAT in determining that the Employment Tribunal had a statutory obligation to consider any blameworthy conduct by the employee that contributed to their dismissal, irrespective of whether this issue was raised during the initial proceedings.

Legal Reasoning

Central to the judgment is the interpretation of Section 123(6) of the ERA 1996, which mandates that if a tribunal finds that the dismissal was caused or contributed to by any action of the complainant, it must reduce the compensatory award accordingly. The EAT reasoned that:

• The Tribunal identified conduct by Mrs. Millicent that could be deemed blameworthy, such as taking unauthorized holiday and failing to apologize, which contributed to the breakdown of her employment.
• Under Section 123(6), the Tribunal was required to consider whether such contributory fault existed and adjust compensation as appropriate.
• The failure to address contributory fault during the initial Tribunal proceedings constituted an omission of legal significance, warranting a remittance for proper consideration.

The EAT emphasized that Employment Tribunals cannot disregard statutory obligations by only considering matters presented by the parties. Instead, they are duty-bound to evaluate all relevant factors that influence the fairness of the dismissal and the subsequent compensation awarded.

Impact

This judgment reaffirms the mandatory duty of Employment Tribunals to assess contributory fault in unfair dismissal cases comprehensively. The key implications include:

• For Employers: Employers must ensure that any potentially blameworthy behavior by employees is not only documented but also clearly presented during Tribunal proceedings to facilitate appropriate compensation adjustments.
• For Employees: Employees need to be aware that their actions leading to dismissal can influence the compensation they receive, emphasizing the importance of maintaining professional conduct in the workplace.
• For Legal Practitioners: Lawyers must comprehensively prepare cases by considering all aspects of a client's conduct that may affect compensation, even if these aspects are not initially apparent or raised by the parties.

Furthermore, the judgment serves as a precedent ensuring consistency in how unfair dismissal compensation is determined, promoting fairness and equity in employment law.

Complex Concepts Simplified

Contributory Fault

Contributory fault refers to circumstances where the employee's actions have partially caused or contributed to their own dismissal. This concept allows the tribunal to reduce the compensation awarded if the employee is found to have played a role in the termination of their employment.

Polkey Principle

The Polkey Principle originates from the case Polkey v A E Dayton Services Ltd [1988] ICR 142, stipulating that compensation for unfair dismissal must not only consider whether the dismissal was fair but also whether the employer followed a fair procedure. If a tribunal concludes that the employer did not follow a fair procedure, this primarily affects the calculation of compensation rather than the fairness of the dismissal itself.

Section 123 of the Employment Rights Act 1996 (ERA)

Section 123 of the ERA 1996 outlines how compensatory awards for unfair dismissal should be calculated. It mandates that tribunals consider all circumstances, including any contributory fault by the employee, to ensure that the compensation awarded is just and equitable.

Redundancy Situation

A redundancy situation arises when an employer needs to reduce the workforce due to various reasons such as economic downturns, business closures, or restructuring. In this case, Swallow Security Services Ltd sought to justify the dismissal of Mrs. Millicent through a redundancy claim, which the Tribunal found to be a pretext for dismissing her due to personal conflicts.

Conclusion

The Swallow Security Services Ltd v. Millicent case underscores the imperative for Employment Tribunals to diligently assess any contributory fault by employees when determining compensation for unfair dismissal. By enforcing the statutory obligation outlined in Section 123 of the ERA 1996, the EAT has reinforced the principles of fairness and equity in employment law. This judgment ensures that compensation calculations are comprehensive, reflecting both the employer's and employee's actions leading to dismissal. Consequently, it serves as a crucial guide for employers, employees, and legal practitioners in navigating the complexities of unfair dismissal claims, promoting a balanced and just approach within the employment landscape.